The History of Debt Collection
Debt has long existed within our society. Even before currency and money even existed, the necessity for debt recovery has been a recurring issue for many people and businesses. So, how has debt recovery actually evolved over thousands of years, and how has it helped many markets repair economic growth. This blog discusses the historical progression of debt collection and how it has overtime helped countless businesses recover the monies rightfully owed to them.
Ancient Civilization (3000BC)
The first known record of debt collection was founded all the way back in 3000BC during the ancient civilisation of Sumer. Ancient civilisations such as the Egyptians, Greeks, Mesopotamians and Romans were all known to log any debt owed to them through papyrus scrolls or clay tablets. The Romans, for example, were pioneers in debt collection in ancient times. Similar to what most today would refer to as a ‘debt collection agency’, the Romans introduced debt collection in the form of special officers named ‘Publicani’. These officers would ultimately be responsible for recovering any debts or taxes owed to civilians. In comparison to today’s world, where options like bankruptcy exist as ways to escape debt repayment, those who couldn’t afford to repay any monies owed often faced a more severe punishment in the face of law. These severe punishments included the death penalty, debt slavery and imprisonment. In today’s world, debtors can be rest assured that there are many less severe ways of recovering monies owed.
The Middle Ages and Beyond (1400 – 1900)
During this time, debt collection was now being recovered by the church, local lords and violent gangs. Those who were chased during this time were chased by a system that had slight regulation and were considered unfair overall. It was not until the 19th century, with the rise of urban and industry economies, that debt recovery as we know it today started to actually take shape. With an increase in houses and businesses, people started to require the necessary funds to buy or build their own properties and thus began to look at the idea of borrowing as a means to purchase. As a result, the need for debt collection agencies became more and more apparent to ensure economic growth within different markets.
Debt Collection in the 21st century
In an ever-evolving digital world, debt collection has now become much more regulated and complex. With financial services being increasingly digitised, many debt collection agencies are now implementing more innovative ways to recover any unpaid invoices owed. It was not until the introduction of credit cards in 1966 and debit cards in 1987 that the credit society as the world we know today actually took shape. With additional ways to fall into debt, debt collection agencies are now facing new challenges and opportunities. A great example of this is through the introduction of ‘Artificial Intelligence’ (AI). With this type of technology now capable of identifying consumer payment plans and habits through various trends and patterns, debt collection agencies can now shift their focus and efforts on cases which are most likely to be refunded. In addition, with the introduction of new legislation that help protect the rights of the debtor, debt collection has overtime transformed into a more ethical practice.
Conclusion
While being an industry that is often misunderstood, debt collection has and still does play a pivotal role in ensuring economic growth. By balancing credit and debtor rights, debt collection in today’s world can be seen as a fair and ethical process that allows both parties to resolve any ongoing debt issues in a principled manner. From the days of clay tablets and papyrus scrolls to the the rising digitalisation of financial technology, debt collection has now entered the 21st century as a modernised and well-regulated practice that helps businesses recover what they are rightfully owed.
If late payments have been affecting your business, why not book a call with one of our friendly debt recovery specialists or phone 01698 821 468.
Lynne is the Founder and CEO of Darcey Quigley & Co.
She is passionate and determined to help businesses get overdue invoices paid quickly.
Having worked within the credit management industry for over 27 years and ran UK leading commercial debt recovery specialists Darcey Quigley & Co for over 17 years, Lynne has helped businesses recover commercial debts from every continent across the globe.
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